Image Source: Unsplash
 

RBNZ Hit The Gas And Raise Rates As Gold Shines Above $2000/oz

Asian equities are trading with a mixed tone after a less than convincing close on Wall Street, with the benchmarks all closing in the red as an initial decline in JOLTS job openings sparked a rally on the ‘bad news good news’ play. However, market reaction faded rapidly as investors took the data as signs of a declining employment market leading to concerns about growth expectations, coming ahead of Friday’s Non Farm Payrolls data, where most money centers are closed in observance of Good Friday. In the US investors will have a very limited window to hedge portfolios in the futures market ahead of an extended holiday weekend. The standout gainer yesterday was Gold, tipping the $2000/oz as investors fled to the yellow metal as a safe haven play given uncertainty about US growth expectations. The RBNZ made a surprise move overnight taking a different tact to its Antipodean neighbor choosing to raise interest rates by 50bps versus an expected 25bps, the Committee expressed a rigid anchoring to their task of returning inflation to 1-3%.

For European investors, today’s PMI releases are second looks and unlikely to see revisions in either the UK or the Eurozone prints. The initial look for the UK noted a pullback in services sector activity, while new orders activity was seen at the highest since March 2002, suggesting that growth should accelerate, despite a tight employment landscape remaining a drag to activity. In the Eurozone, headline activity advanced to register ten-month highs in March with elevated new orders indicating an uptick for growth ahead. 

The US ISM services index for March is released later today. In February, the headline index nudged down to 55.1 from 55.2, however, these are historic levels representing robust output growth. The orders subcomponent also ticked up to print its highest levels since November 2021, suggesting services activity could continue to accelerate. This ongoing strength in services activity is the fly in the ointment for market participants pushing the ‘year-end rate cut’ narrative. Ahead of Friday’s payrolls release, markets will receive the March ADP measure of private sector jobs growth as an early signal towards what can be expected from Friday’s official data, however, even after ADP recalibrating the model, it still is less than reliable read on what can be expected from the official release.
 

FX Options Expiries For 10 am New York Cut 

(In bold represent larger expiries, more magnetic when trading within daily ATR)

• EUR/USD: 1.0900 (EU4.29B), 1.1000 (EU2.17B), 1.0950 (EU2B)
• USD/JPY: 133.00 ($1.32B), 131.00 ($1.17B), 134.00 ($1.15B)
• USD/CAD: 1.3600 ($1.37B), 1.3700 ($362M), 1.3555 ($311M)
• GBP/USD: 1.2500 (GBP844.8M), 1.1600 (GBP808M), 1.1500 (GBP717.3M)
• AUD/USD: 0.6405 (AUD817M), 0.6700 (AUD559.1M), 0.6760 (AUD422.5M)
• USD/CNY: 6.8500 ($669.4M)
• NZD/USD: 0.5900 (NZD699.4M), 0.6215 (NZD310M)
• USD/BRL: 5.3400 ($524.4M), 5.3000 ($324.5M), 5.1500 ($320M)
• EUR/GBP: 0.8800 (EU465M), 0.8805 (EU370.2M)
• USD/MXN: 18.11 ($343.6M)
• USD/KRW: 1280.50 ($450M)
   

Overnight News of Note

• Stocks Struggle As US Jobs Dry Up, Kiwi Leaps On RBNZ Surprise
• Kiwi Jumps After RBNZ Delivers Surprise Half-Point Rate Hike
• Gold Holds Surge Past $2,000 With Record High Suddenly In Sight
• RBA’s Lowe Says April’s Pause Doesn’t Imply Rate Hikes Are Over
• BoJ Could End Yield Curve Control In April, Ex-Official Says
• Fed's Mester Says Rate Target Will Need To Go Over 5%
• Traders Bet Fed Won't Raise Rates Further As Job Market Cools
• US IRS To Unveil $80 Bln 10-Year Spending Plan This Week
• US Home Prices Seen Rebounding After An Exp $1Tln Plunge This Year
• UK Businesses More Upbeat About Sales Despite Weak Growth
• Traders Rush To Cover Options Exposure During Peak Fed Uncertainty
• Oil Extends Rally As Investors Shift Focus To Lower Inventories
• Johnson & Johnson Proposes Paying $9 Billion To Settle Talc Lawsuits
• TD Becomes Biggest Bank Short With $3.7 Billion On The Line

(Sourced from Bloomberg, Reuters and other reliable financial news outlets)
 

Technical & Trade Views

SP500 Bias: Intraday Bullish Above Bearish Below 4080 - Target Hit, New Pattern

• Primary support is 4000
• Primary objective is 4207
• Below 3985 opens 3950
• 20 Day VWAP bullish, 5 Day VWAP bullish

(Click on image to enlarge)

EURUSD Bias: Intraday Bullish Above Bearish below 1.0930

• Primary support  is 1.07
• Primary objective is 1.1128
• Below 1.0700 opens 1.0660
• 20 Day VWAP bullish, 5 Day VWAP bullish

(Click on image to enlarge)

GBPUSD Bias: Intraday Bullish Above Bearish below 1.24 - Target Hit, New Pattern

• Primary support  is 1.2250
• Primary objective 1.2659
• Below 1.22 opens 1.2010
• 20 Day VWAP bullish, 5 Day VWAP bullish

(Click on image to enlarge)

USDJPY Bias: Intraday Bullish above Bearish Below 133.00

• Primary resistance  is 135.15
• Primary objective is 129.15
• Above 136 opens 137.90
• 20 Day VWAP bearish, 5 Day VWAP bearish

(Click on image to enlarge)

AUDUSD Bias: Intraday Bullish Above Bearish below .6696 

• Primary resistance is .6740
• Primary objective is .6950
• Below .6560 opens .6450
• 20 Day VWAP bearish, 5 Day VWAP bearish

(Click on image to enlarge)

BTCUSD Intraday Bias: Bullish Above Bearish below 26500

• Primary support 23000
• Primary objective is 30000
• Below 23000 opens 22400
• 20 Day VWAP bullish, 5 Day VWAP bearish

(Click on image to enlarge)

More By This Author: